Haiti: From trafficking to debt

11 November by Jérôme Duval

This Caribbean country is not in debt, it is a creditor. It is France which owes it money. Explanation by Jerome Duval, of CADTM. Translated by Jenny Bright.

Poverty in colonised countries has greatly increased due to a transfer of debt: the debts incurred by the colonial powers to the World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, to make the most of it, were then transferred without their consent to the colonised countries that gained their independence. They constitute a case of odious debt, as well as the subsequent debts contracted to repay them.

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The uprising of 1791, by Ulrick Jean-Pierre

In Santo Domingo, on the night of 22-23 August, 1791, tens of thousands of slaves simultaneously rose up in an armed uprising, propelling a long process that led to history’s first abolition of slavery, on the 29th of August 1793, and the proclamation of independence. Santo Domingo, then reclaiming the name of Haiti, became the first independent black republic in 1804, a unique case in the history of a revolt of slaves that gave birth to a State. France has probably never forgiven this uprising, resulting in the loss of revenue from its slave system and thousands of destroyed sugar and coffee plantations. Haiti paid very dearly: in 1825, the country was forced to pay France 150 million gold francs (i.e. France’s annual budget at the time) intended to “compensate” the former slave master colonists for loss of “ownership” in exchange for recognition of its existence as a nation-state. The ransom was imposed under the threat of military invasion: on the 17th of April, 1825, a fleet of 14 warships were assembled in the bay of Port-au-Prince, ready to intervene, suggesting a possible restoration of slavery in the case of insubordination.

This ransom extorted from the Haitian people for “daring” to achieve independence, was renegotiated thirteen years later, in 1838, to 90 million following an agreement scandalously named “Traité de l’amitié” (Treaty of friendship). With generations weighed down by the weight of an illegitimate debt, Haiti, which has struggled for years to emancipate itself from French tutelage and free itself from slavery, would pay, from 1825 to 1893, every last cent of the ransom to its former colonists. For Louis-Georges Tin, president of the Representative council of black associations (Conseil représentatif des associations noires - Cran), “the money must return to the Haitian state and Haitian civil society. The time has come to amend this double punishment suffered by the island, slavery then ransom. The destitution of Haiti is due to the payment of these 90 million gold francs, which forced the country to become indebted over decades”.

No excuse, no reparation, no restitution: without a conscience, France ransomed the people

In April 2003, on the occasion of the bicentennial of the death of Toussaint Louverture, President Jean-Bertrand Aristide affirmed that it is France which is indebted to Haiti, and not the opposite. He demanded “restitution and reparation” for the damages inflicted by slavery and for the ransom demanded in 1825. He requested from France 21 billion dollars, or the capitalised value of the 90 million francs, to be paid as a tribute. But after the Franco-American political and military intervention that led to the overthrow of Aristide in February 2004, the various regimes that succeeded at the head of the Haitian state, would abandon the claim for restitution.

It was not until the earthquake of the 12th of January, 2010, which resulted in at least 250,000 deaths and left nearly 1.3 million people homeless, that a French president would set foot on the territory of their former colony for the first time since the independence of the island in 1804. Thus, after having let more than a month pass after the earthquake, Nicolas Sarkozy finally made a visit for just four hours on the 17th of February. This was an opportunity to praise the French private sector by paying tribute to Suez and Veolia who “repaired water pipes” or EDF which “restored public lighting”. And to announce some 326 million euros in aid. Of this sum, 56 million would not be mobilised since it referred to an accounting erasure from the Paris Club Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

of the bilateral debt that the island had contracted vis-à-vis France.

Sarkozy’s generous declaration of debt cancellation as a response to the disaster was revealed to be part of a heinous debt-laundering mechanism. Moreover, there is nothing new here since this decision actually dates from July 2009, after Haiti reached the completion point of the enhanced heavily indebted poor countries Heavily Indebted Poor Countries
In 1996 the IMF and the World Bank launched an initiative aimed at reducing the debt burden for some 41 heavily indebted poor countries (HIPC), whose total debts amount to about 10% of the Third World Debt. The list includes 33 countries in Sub-Saharan Africa.

The idea at the back of the initiative is as follows: a country on the HIPC list can start an SAP programme of twice three years. At the end of the first stage (first three years) IMF experts assess the ’sustainability’ of the country’s debt (from medium term projections of the country’s balance of payments and of the net present value (NPV) of debt to exports ratio.
If the country’s debt is considered “unsustainable”, it is eligible for a second stage of reforms at the end of which its debt is made ’sustainable’ (that it it is given the financial means necessary to pay back the amounts due). Three years after the beginning of the initiative, only four countries had been deemed eligible for a very slight debt relief (Uganda, Bolivia, Burkina Faso, and Mozambique). Confronted with such poor results and with the Jubilee 2000 campaign (which brought in a petition with over 17 million signatures to the G7 meeting in Cologne in June 1999), the G7 (group of 7 most industrialised countries) and international financial institutions launched an enhanced initiative: “sustainability” criteria have been revised (for instance the value of the debt must only amount to 150% of export revenues instead of 200-250% as was the case before), the second stage in the reforms is not fixed any more: an assiduous pupil can anticipate and be granted debt relief earlier, and thirdly some interim relief can be granted after the first three years of reform.

Simultaneously the IMF and the World Bank change their vocabulary : their loans, which so far had been called, “enhanced structural adjustment facilities” (ESAF), are now called “Growth and Poverty Reduction Facilities” (GPRF) while “Structural Adjustment Policies” are now called “Poverty Reduction Strategy Paper”. This paper is drafted by the country requesting assistance with the help of the IMF and the World Bank and the participation of representatives from the civil society.
This enhanced initiative has been largely publicised: the international media announced a 90%, even a 100% cancellation after the Euro-African summit in Cairo (April 2000). Yet on closer examination the HIPC initiative turns out to be yet another delusive manoeuvre which suggests but in no way implements a cancellation of the debt.

List of the 42 Heavily Indebted Poor Countries: Angola, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoro Islands, Congo, Ivory Coast, Democratic Republic of Congo, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Honduras, Kenya, Laos, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Vietnam, Zambia.
initiative (enhanced HIPC initiative) on the 30th of June, 2009. For its part, the World Bank did not cancel the 38 million dollar repayment, but only suspended it for five years and, the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

decided to grant “aid” worth 100 million dollars in the form of... a loan, of course without interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. , but which will also have to be repaid. We are far from the 21 billion requested by Aristide and social movements such as the Haitian Platform to Advocate Alternative Development (PAPDA) and far from satisfying Haiti’s needs.

Seizing the opportunity, a group of activists called the Committee for the immediate refund of stolen billions (Comité pour le remboursement immédiat des milliards envolés - Crime) carried out a hoax in July 2010, announcing on a fake website of the French Ministry of Foreign Affairs the intention of France to restore to Haitians on the 14th of July the improperly collected sums. Nothing happened. Despite an open letter to French President Sarkozy, France still refused to repay the historic debt to Haiti. France, however, has a heavy burden of responsibility for the state of poverty which its population is suffering. For example, when it granted political refugee status and immunity to Jean-Claude Duvalier, exiled to the Côte d’Azur in France after 29 years of dictatorship from father to son, with a fortune of 900 million dollars stolen from the coffers of the Haitian State, an amount then higher than the external debt of the country estimated at 750 million dollars in 1986.

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Port-au-Prince, 12 May 2015. Photo Jean-Claude Coutausse

Lie and aberration of Hollande’s “moral debt”

It is probably not due to chance that more than two centuries had passed since the independence of the island before a French head of state took their first trip - this time official - to Haiti. The visit of President François Hollande on the 12th of May, 2015 was greeted by demonstrators demanding “compensation” and “restitution” by France of the sum paid by Haiti for its independence. “Hollande, money yes, morality no”, could be read on signs, in reference to the speech made a few days earlier by the head of state visiting Guadeloupe on the 10th of May. Raising many hopes in Haiti, he said: “When I come to Haiti, I will pay the debt that we have.” But, in reality, Hollande wanted to speak only of “moral debt” and not of restitution of the billions that Haiti paid to France. As pointed out by Louis-Georges Tin, also author of the book Esclavage et réparations, comment faire face aux crimes de l’histoire (Slavery and Reparations, how to deal with the crimes of history) (Stock, 2013): “Repentance is a moral or religious issue; reparation is an economic and political problem.” Now, Le Nouvelliste, the island’s main newspaper, writes: “... this moral debt, Haiti has never asked compensation for. It is irreparable, we agree. We will leave it as a blot on the crest of the civilised”. But he goes on: "... France also has a financial debt with regard to Haiti. This debt is a case that is unique in history. This is the only time the victors have paid tribute to the vanquished. And it is this ransom paid throughout the 19th century that it is necessary to speak of, since it has hindered the Haitian economy, strangled its development and still mortgages its future.

The French government prefers to ask the population to forgive and forget the issues that disturbed the past rather than finally understand that Haiti is not indebted, but a creditor.

See online : Tlaxcala

Tribune originally published in French on Politis on the 19th of September 2017. Translated by Jenny Bright and edited by Supriyo Chatterjee for Tlaxcala.


Jérôme Duval

member of CADTM network and member of the Spanish Citizen’s Debt Audit Platform (PACD) in Spain (http://auditoriaciudadana.net/). He is the author, with Fátima Martín, of the book Construcción europea al servicio de los mercados financieros (Icaria editorial, Barcelona 2016) and he also co-authored La Dette ou la Vie (Aden-CADTM, 2011), which received the award for best political book in Liège (Belgium) in 2011.




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